WWF and UNEP Finance Initiative recognize the Small & Medium Enterprise (SME) sector as an investment avenue that can not only offer high returns but also ensure sustainable development in emerging economies. This is particularly true for Africa, where SMEs form the backbone of private sector at all levels of development, and make a significant contribution to economic development in general and industrial development in particular. However, access to finance remains the biggest impediment to successful creation, survival, and growth of SMEs in Africa. In light of this, successful SME financing models in Africa need to be scaled while new ones need to be created that will change the balance of risks and incentives for the mainstream investment community, leading to increased financing for sustainable SMEs. Towards this end, WWF and UNEPFI will jointly organize an international workshop on September 26th 2007 in Geneva to discuss innovative investment and risk mitigation mechanisms to increase private sector investment in “sustainable” SMEs in Africa. Attendees to the meeting will include in African chambers of commerce, bilateral and multilateral aid agencies, philanthropic foundations and “blended-value” investors, private financial institutions including commercial banks and asset managers, financial intermediaries and SME specialists. Specific objectives of the workshop are to:

Outline the importance of SMEs to sustainable development, problems posed by their lack of access to capital, and the reasons for this lack of investment.

Clarify the type of SMEs (sector and manner of functioning) that are desirable from a sustainable development perspective that could benefit from improved financing.

Outline and appraise current innovative financing initiatives for SMEs, assess the extent to which they address the sustainable development dimension, and the barriers to scaling up these innovative initiatives.

Outline the risk issues facing investors and a range of risk reduction mechanisms that could be created to thereby increase financing.

Outline 2 to 3 mechanisms that could have most impact, be most suitable as a tool to promote sustainable SME development, are the most appropriate for ‘hybrid’ collaboration (business, NGO, government), and map out the respective roles and incentives for different actors.

Gain and integrate feedback from participants into reports from the workshop

Request and hopefully gain commitment from participants to work together on this agenda, with or without the workshop’s convening partners. This will be a facilitated process at end of the workshop on participants’ interest in collaboration and specific examples of follow up actions.

On a timely note, the workshop will immediately follow the Geneva Private Capital Symposium, whose theme is on “Investing Private Capital in Emerging and Frontier Market SMEs”. While the Symposium will shed light on need for SME investment in a broader context, the workshop will be a concrete follow-up with three main focus themes: Africa, innovative financing models, risk & risk mitigation for SME financing. In this context, the workshop will highlight specific financing models for sustainable SMEs in Africa, and discuss specific risk reduction mechanisms that could lead to increased investment in this sector. The workshop will be organized in collaboration with and support from: